Is China electricity demand dull?

Electricity supply capability is in a risky situation in Japan because of a lack of nuclear power supply and a strong demand boosted by the recent cold weather.

Cold weather surely boosts electricity use in China as well, but news about the power shortage are not heard despite industrial activities resumed after the lunar new year holidays.

Is current electricity demand in China sluggish?

Total electricity generation capacity in China as of the end of 2011 was about 1.05 billion kilowatts. Thermal power was 760 million kw, hydroelectricity was 230 million kw and rest of capacities were nuclear power and wind power. Generation capacity was increased by 90 million kw during 2011.

Meanwhile, total supply of electricity in 2011 rose 12% from a year ago to 4.6 trillion kWh, according to the China National Bureau of Statistics. Electricity supply capability in China recorded shortage of 30 million kw in the highest demand season in 2011.

China Electricity Council forecasts that the country's electricity demand in 2012 is likely to increase 9.5% on year. The figure is lower than the previous two years when growth rates scored double digits.

In 2012, about 85 million kw of new generation capacity is scheduled to be installed. However, the council forecasts the new capability is not enough to meet the increasing demand and 30-40 million kw of supply shortage is likely to be seen in the peak demand season this year.

In spite of the forecasts, the electricity supply capability in China seems to be enough to meet demand at present.

On the other hand, the deficit situation at Chinese electric power companies due to cheaper electricity prices and higher coal prices was solved.
Local coal prices are sinking and the government hiked official electricity sales prices in December.

Chinese power companies mainly burn coal for thermal power generation. Regional Bohai-Rim coal prices have declined from RMB 853 per tonne in November to RMB 782 per tonne in early February.
It means that electric power companies are no longer suffering losses and not hesitant to generate electricity.

If current electricity demand in China is rising 9.5% from a year ago, power supply in February could be about 350 billion kWh. The maximum power demand is likely to stay at around 910 million kw in that case. Power companies seem to have enough spare capacity.

Declining regional coal prices also suggest that electricity demand remains weaker.
Anyway, strong demand of gas oil for power generation at factories caused by electricity supply shortage is not likely to be seen in the near future. Such gas oil demand was often seen in China in the past few years.

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